Nigeria’s Central Bank Chief Emefiele Says It’s ‘Inappropriate’ to Give Colouration to Currency Printing

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, Thursday weighed in on the raging controversy over whether or not the apex bank printed money to augment funds from the Federation Account Allocation Committee (FAAC) distributed to states and the Federal Capital Territory (FCT) in March.

Emefiele told reporters in Awe, Nasarawa State, that the controversy was unnecessary as the CBN acted in national interest.

He also unfolded plans by the CBN to place sugar and wheat on foreign exchange restriction as part of measures to preserve the foreign reserves.

Edo State Governor, Mr. Godwin Obaseki, had last Saturday triggered the controversy as he accused the federal government of printing between N50 billion and N60 billion to augment funds shared to states and the FCT last month.

However, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, at the end of a meeting of the Federal Executive Council (FEC) in Abuja on Wednesday, described the claim as not only untrue but unfortunate.

But Obaseki in a statement to counter the minister, doubled down on his position, asking the federal government to stop playing the ostrich and take urgent steps to end the prevailing fiscal slide.

Emefiele, who spoke during a facility tour of the Dangote Integrated Sugar complex in Tunga, Awe Local Government Area of Nasarawa State, expressed dismay over attempts to distort the concept of printing of money.

He said: “It’s very inappropriate for people to just give colouration to printing of money as if it’s some foreign word coming from the sky.”

He said since the state governments had resorted to indicting the federal government and by extension the CBN for assisting them with bailout loans to meet their financial obligations during the 2015/2016 fiscal crisis, they must repay the debts.

In July 2015, President Muhammadu Buhari had approved a N1.5 trillion intervention package to assist bankrupt states pay salaries.

Although Emefiele did not elaborate on states repaying the budget support facility, a source confided in THISDAY that the CBN was targeting May for the takeoff of the repayment plan.

He justified the CBN’s interventions in the economy, noting that these are also some of the measures currently being adopted by developed countries to reflate their economies.

He stated that it would have been irresponsible of the CBN or any central bank to stand idle and refuse to support its government at this critical point in time.

Emefiele said: “If you understand the concept of printing of money. The concept printing of money; it’s about lending money.

“That’s our job – to print. It’s about lending money and so there’s no need putting the controversy about printing of money as if we are going into the factory printing the naira and start distributing on the streets.

“I think it’s important for me to put it this way – that in 2015/2016, the kind of situation we found ourselves now, which is even worse than 2015/2016, we did provide budget support facility to all the states of this country.

“That loan remains unpaid till now. And we are going to insist on the states paying back those monies since they’re accusing us of giving them loans.

“What I keep saying is that it’ll be irresponsible for the CBN or any central bank or any FED to stand idle and then refuse to support its government at this time.

“What is being done is being done in any clime. And at the last MPC meeting, I gave data on what is being done in developed economies to shore up their economy and take them out of recession.

“Nigeria is unfortunately in a very bad situation. I am not going to pretend about it, in the sense that we are facing problems about productivity output, which is GDP. Luckily we managed to come out by a hair’s breadth.”

Emefiele also said the CBN would soon place wheat and sugar on its list of items that are not valid for foreign exchange (FX).

He stated that the apex bank was interested in the project, adding that between $600 million and $1 billion is spent annually on the importation of sugar.

Emefiele, who was accompanied by the state Governor, Mr. Abdullahi Sule; the Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, and the President/Chief Executive Officer, Dangote Group, Alhaji Aliko Dangote, pledged support for the $500 million project, which is expected to commence production by 2023.

He said in line with the pronouncement of the president on local food production and self- sufficiency, the sugar complex deserved government’s support.

Emefiele assured Dangote that CBN would provide forex for the importation of equipment for the project.

On the planned import restrictions, he said: “And let me say this; we are looking at sugar and we are looking at wheat. We started a programme on milk about two years ago and eventually these products will come onto our FX restriction list.

“We just want to see to what extent we see the traction that is coming from those currently importing those items. We are putting their feet on fire to say we must all work together to produce these goods in Nigeria rather than import them”.

On how much the CBN could commit to the sugar project, Emefiele said: “We have not made up our mind but as you heard from Dangote, it’s a project of about $500 million.

“And if you convert that in naira, you know what that is. I know he’s going to commit some equities to it. From there we will determine the shortfall and we will come in through intervention through the banks.

“Of course, foreign currency will be provided as long as it is for importation of equipment for the project through the banks for whatever loans required.

“And we will gradually begin to restrict allocation of FX to those who want to import sugar until we achive these results.”

Emefiele thanked Dangote for supporting the government’s backward integration programme.

He described the 60,000-hectare sugar complex as a big project that is unprecedented.

He said: “This is four to five times bigger than the sugar project Buhari commission in Niger State two years ago.”

He stated that the factory would create jobs and increase revenue for the state as well as boost its economic viability.

Dangote, however, said the project had the prospects of providing about one third of the country’s sugar consumption, adding that the initial investment will be about $500 million.

He said the target was to achieve about 250 million tonnes.

“That’s why you see everybody here,” he added.

According to him, the project will generate 150,000 jobs within and outside the state to help solve employment challenges.

He said the project would also help solve the challenges of power in the state, as it will generate an excess of about 90 megawatts of electricity to power the state, using ethanol.

He said: “To the state, it means the place will be up and running. I don’t think there will be shortages of power in Nasarawa State.”

Dangote also thanked the federal government for introducing the National Sugar Master Plan, describing it as a good policy which encouraged players in the sector to embark on backward integration, “not just for us to make money from sugar refinery.”

He described Emefiele as “not just governor of the CBN but a development governor because he’s just not looking at monetary policy but also what he can do to support the naira because he has a problem today meeting up with the demands of imports.”

Dangote expressed optimism that the federal government’s continued support for projects like his will strenghthen the naira in the long run.

He said: “The CBN not only want to support the naira but also to see that jobs are created.

“You can only create 100 million jobs of the federal government through these kinds of projects.”

Obinna Chima in Lagos and James Emejo in Abuja

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